Saturday, November 9, 2013

The Motion for Attorney Fees: What is Reasonable?

After a review of attorney fees in the landlord - tenant ("LL/T") arena, it was clear that neither judges nor attorneys are really clear as to what is a reasonable fee or not. It's almost as if there is a gut instinct about what is fair and what is not. The result is that either attorneys are not being paid a fair wage for their work, or the landlord is being overcharged. Neither is a good thing.

An informal poll of attorneys indicated that I was worth anywhere from $175 - $250 per hour. Surprise, surprise: the attorneys who represent landlord downplayed my worth, while the attorneys who represent tenants increased my value. So what is the answer? At the time of this writing, I am calculated to be worth $241.34 per hour.

Whoa, Whoa, Whoa... How Did You Arrive at Such an Exact Figure?

Good question. But before I get to that figure let's go over what is happening in the marketplace. The landlord - tenant statutes grant attorney fees to the prevailing party. This is the flip side to the landlord favorable statutes. If a tenant is intelligent enough to grab an attorney and that attorney prevails, the landlord is looking at a financial thumping for messing up. On the other side, if the landlord's attorney wins the chances of regaining money from the tenant is pretty negligible because... well let's face it, a lot of tenants cannot afford a mortgage, much less an attorney bill.

In the beginning, not being familiar with the worth of attorneys and not understanding where these figures came from I did what most newly minted attorneys do, I looked it up and discovered several sources which discussed what a reasonable fee was but either didn't really give a good reason for how they calculated it or what it actually should be (in the form of a convenient chart or formula I could work with). Fla. R. Pro. Conduct 4-1.5 for example outlines "factors" to be considered in determining reasonable fees and costs.

Factors like, "the nature and length of the professional relationship with the client." Really? How does that come into play? If I represent my wife, does the cost go up (because I'll never hear the end of it if I lose) or down (because I have a personal incentive to win)? If I have had the client for years, does it go up or down? If the client is an ex-girlfriend, does the cost go up or down? What if it's my dentist? Accountant? Pharmacist? What about the staff of my favorite restaurant who know my family and I by first name?

The rule goes on to say that "[i]n determining a reasonable fee, the time devoted to the representation and customary rate of fee need not be the sole or controlling factors. All factors set forth in this rule should be considered, and may be applied, in justification of a fee higher or lower than that which would result from application of only the time and rate factors." Well... I don't know about you, but that cleared it up.

Unsatisfied, I decided there has got to be an easier way, based on empirical methods, to calculate the attorney fees in LL/T matters. So yeah, damn that science background of mine, because here is comes...

Known Orders and Illogical Curves

When I began this study I decided to obtain as many orders detailing the award of attorney fees and see what the data would be like. I was pleasantly surprised because the awards listed hours worked, the worth of the attorney (in $ / hr), years of experience, expert witness fees sometimes, and contingency fee multipliers (which, by the way, is now between 1.5-3 depending on difficulty; but that's another post). Just with the years of experience and hourly values I could put together a fairly decent ball park estimate.

With this kind of data, I should be able to approximate a math formula so that I could calculate my own worth. I was overjoyed, until I saw this:

What is this? Attorneys with 5-7 years of experience making more per hour than attorneys with around 30 years of experience? These were all within the past five years, and most of the data points were between 2012-13. This curvy... curve thing, while a formula, makes no sense.

The problem is that a reasonable attorney fee can only go so high, and any higher it obviously becomes unreasonable. Also, whatever that limit is, anything below it is more than reasonable. Attorneys out there are underpricing themselves, likely in an attempt to assure the judge that their rates are indeed reasonable. But why should an attorney cut him or herself short?

What Type of Curve Should Be Used?

That is a really good question. I settled on a linear function because a linear function would allow the profession to up their worth at certain levels of experience without drastically affecting the remainder of the curve, or giving ridiculous results over time. So if a 1 year attorney was getting $200 and then an order comes out giving that attorney $220, the new standard is $220 and only slightly ups the rates between 1 year and 15-20 years of experience.

Imagine a curve that curves upward from year one and flattens out around 15 years at $400 per hour. Over time, as orders come out giving more worth to beginner attorneys, the experienced attorneys will not progress and soon a flat line will emerge. This would mean that unless experience attorneys are increasing their worth in a field of practice as regularly as young attorneys are, soon a flat line will be observed. Then it will not matter if you are starting out or about to retire, you are worth $400. That hardly seems fair for the extremely experienced attorneys out there.

Next, imagine another curve that starts flat and ramps upward instead. While this may seem grand (and I certainly would appreciate it in 1-2 decades) the curve never stops and the "reasonable" rate for experienced attorneys would certainly be cringe-worthy. While at 15 years an attorney may be worth $400 per hour, soon after that attorney would be worth $500, $1000, $15000, $1,000,000 per hour. Such results are absurd and certainly not what is intended.

Eliminating the Orders Given to Attorneys Who Undervalue Themselves

Next, the values which are obviously undervalued are removed from the dataset, meaning: 1. any order awarding a more experienced attorney less hourly then an attorney with less experience; and 2. any order awarding less hourly to an attorney where another attorney of roughly equivalent experience was awarded more. This is not to say that the other orders were unreasonable, but the purpose of this exercise is to determine the upper limit of attorney fees that should be awarded.

When these orders were eliminated what emerged was a roughly linear trend for attorneys between 4-15 years of experience.

This is really good. Although I initially wanted a linear function it appears that the seemingly random logic of the orders giving attorney fees was that roller-coaster looking curve above, when everything undervalued is extracted what appears is a pretty decent function.

So You Look on the Graph and See What You're Worth?

Yup. Or you can plug your experience (in years) into the following formula (current as of 11/5/2013):

W(y) = (125y + 2525)/11

where W is your worth,

y is your experience in years, and

A is for how awesome this is!

Like all blog entries dealing in the mathematics of law, an example is required:

I've been practicing in landlord - tenant matters for 1.038356164 years (that's so ridiculously precise)

W(1.038356164) = (125*1.038356164 + 2525) / 11

W(1.038356164) = (129.7945205 + 2525) / 11

W(1.038356164) = 2654.7945205 / 11

W = $241.34

And that is how I got such a precise calculation, to answer your earlier question. In other words, I calculate my going rate based on the years I've been practicing measured in days. This means I get regular raises and my reasonable rate is always bumping up against the line and never falling behind where I should be. Tomorrow I get to celebrate when my going rate goes up to $241.35, joy!

For those of you who hate math, you're welcome:

0 years = $229.55

1 years = $240.91

2 years = $252.27

3 years = $263.64

4 years = $275.00

5 years = $286.36

6 years = $297.73

7 years = $309.09

8 years = $320.45

9 years = $331.82

10 years = $343.18

11 years = $354.55

12 years = $365.91

13 years = $377.27

14 years = $388.64

15 years = $400.00

Beyond that we have no good data, but to project:

16 years = $411.36

17 years = $422.73

18 years = $434.09

19 years = $445.45

20 years = $456.82

21 years = $468.18

22 years = $479.55

23 years = $490.91

24 years = $502.27

25 years = $513.64

26 years = $525.00

27 years = $536.36

28 years = $547.73

29 years = $559.09

30 years = $570.45

There you have it, what you're worth in Florida's market for landlord - tenant matters. So the question now is this, do you have an order awarding attorney fees in Florida? If so, send it over and I'll include it in the data if it isn't already included which may make things a little more accurate. If there is a change, it will be reflected in this blog.

If you are in need of an expert in attorney fees in a landlord - tenant matter, don't get your briefs in a bunch, give me a call. I'll be happy to review your file, sign an affidavit, and appear in court for you if your file is in order. TTFN.